Higher-mortgage refinancings are on the increase

With more equity in their homes due to higher home values, Freddie Mac has reported that 83 percent of homeowners refinancing their property in the third quarter this year took out new mortgages that were at least 5 percent higher than their original mortgages.

By contrast, in the third quarter of 1999, 70 percent refinanced mortgages that were at least 5 percent higher.

Freddie Mac, which supplies funds to lenders and in turn purchases mortgages to sell in financial markets, credited a "strong" economy in its quarterly refinancing review with enabling homeowners to refinance at a higher amount and take equity out of their properties.

The company also reported that consumer refinancing in the third quarter made up about 19 percent of the market, compared with 21 percent in the third quarter last year.

Freddie Mac's survey also showed that the median age of a refinanced loan was 6.8 years compared with 6.2 years in the third quarter of 1999. The median property appreciation rate was 32 percent in this past quarter, compared with 20 percent in the third quarter in 1999.

Only 9 percent of the refinancing during the past third quarter was for an amount lower than the original loan, according to Freddie Mac.